Thomas J. Falk
Chairman and Chief Executive Officer
Excerpt from remarks to Boston College’s Chief Executives’ Club of Boston
April 3, 2014
TAKEAWAY: Consumer Preferences
What we’ve tried to do is do research in multiple places, so we’ve got a lot of innovation capability in the U.S. because that’s our heritage. We have an innovation center in Colombia, an innovation center in Seoul. And then we’ve got sort of small innovation scouts in individual markets to pick up on technology ideas.
So a lot of the core material science and R&D gets done in those big centers. But then, in market, you’re looking at adapting and adopting that to the local consumer.
And you find consumer preferences are pretty consistent all over the world, but there are some important differences.
So, for example, in Korea, baby skin health and how the skin looks is much more important to mom than it is in any other market in the world. And so having a breathable outer cover so air circulates so that the baby doesn’t get clammy skin is much more important.
Now, as it turns out, that is a benefit everywhere else. It’s just not as important. So you want to lead with that in Korea. So they may choose to prioritize innovation in that area ahead of other things that might be in the pipeline.
And so, it’s understanding what’s different based on research and not on personal opinion. So you’ll also find, in the consumer world, that everybody’s got a point of view, and a sample size of one is extremely dangerous.
So you’ve got to be out doing research—and then understanding you don’t have to test it in 100 countries. Usually there’s a half a dozen countries that we know capture the range of differences in the market. And if it tests well in Singapore, it’s probably going to work in—you know, in Malaysia and Vietnam and a few other places. And so it’s really building that learning over the years and then applying it.
You occasionally continue to check and see what’s going on. In this digital, mobile, social world, you can do R&D a lot quicker than you used to. And we’ve built virtual communities of consumers online around a similar demographic. So we’d have, a community of 600 young late-teen women that we can give ideas to about feminine care products.
Now, you have to make it interesting enough and have other content and other things in it. You may catch their perspective on other social issues as well. And you recruit them, and you can flash them out an ad idea, a packaging concept, but you also have to mix it in with some other things and have an online conversation.
And so you gather information in a little different way than the—we still do focus groups. We just don’t do as many of them, because you can do this kind of research a lot faster and cheaper.